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CEKA, forecast 19% yield
Current, target price Rp1,860, 7,501 (+303%)
April 20th , 2021
1 minute read
Sales, in line
Cashflow, negative
1 minute read
Sales, in line
- Sales decreased seasonally by -2% in the first quarter to 1,106 billion rupiah, which is -1% below our forecast.
- This is after a seasonal 29% increase in the fourth quarter & brings the quarterly average growth to 7%.
- We predict average growth of 5% a quarter in this next 12 months which will bring sales to 1,334 billion rupiah by the first quarter of 2022.
Cashflow, negative
- Cashflow was negative -99 billion rupiah in the first quarter after positive 44 billion rupiah in the fourth quarter.
- Average quarterly cashflow is now negative -29 billion rupiah.
- We use flat quarterly investment spending of -13 billion rupiah, which with higher sales, gives a positive average quarterly cashflow of 60 billion rupiah in this next 12 months.
Seasonally lower sales, margins, negative cashflow, less cash, but still expecting positive cashflow ahead & a 19% yield, higher target price...
Balance sheet, lower net cash
Profit, lower margin
Value, a 19% yield
- With negative cashflow, the net leverage of cash minus total liabilities was +73 billion rupiah in the first quarter from +136 billion rupiah in the fourth quarter & +286 billion rupiah a year ago.
- With our forecast higher cashflow & assuming a dividend payout of -213 billion rupiah...
- ...net cash will be +99 billion rupiah in 12 months time.
Profit, lower margin
- First quarter profit was lower at 49 billion rupiah from 67 billion rupiah in the third quarter with lower sales.
- The cash cost ratio of net profit add back non cash costs minus sales as a percent of sales was also up to -95%.
- We use lower average -94% costs, to predict a higher next 12 months profit of 266 billion rupiah.
Value, a 19% yield
- CEKA has paid out capital of 909 billion rupiah in the last five years.
- At the current market value of 1,107 billion rupiah, it’s at only 1.22X capital paid, 0.22X sales, 0.69X assets, 0.81X equity, with a 19% profitability & a 19% yield.
- Our free cashflow forecast is now 238 billion rupiah. At 1.6% with a 0.3X adjustment, gives a 303% higher target price of 7,501 rupiah.
